Adarsh Vidhya Mandir Samiti Nagar Vs ITO (ITAT Jaipur)
Participation in Assessment Does Not Prove Knowledge of Order: ITAT Condones 250-Day Appeal Delay
Introduction
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 250-day delay in filing an appeal before the CIT(A) against a penalty of ₹20,000 under section 271(1)(b). The Tribunal accepted the assessee-society’s explanation that its authorised representative had not communicated the relevant orders to it in time.
The Tribunal held that participation in assessment proceedings does not, by itself, establish awareness of orders subsequently passed or demonstrate that an appeal was deliberately delayed.
It also condoned a 15-day delay in filing the appeal before the Tribunal and restored the penalty appeal to the CIT(A) for adjudication on merits.
Background of the Case
Adarsh Vidhya Mandir Samiti Nagar is a society engaged in imparting education through an educational institution.
According to the Secretary’s affidavit reproduced in the order, the society had not filed its return for Assessment Year 2015-16, as it considered its entire income exempt under section 10(23C)(iiiad).
The Assessing Officer reopened the assessment after noticing cash deposits of ₹52,36,771 in an Axis Bank account. During the proceedings, the society’s representative submitted that the deposits represented school-fee receipts and furnished a cash book.
However, the Assessing Officer completed the assessment on 10 March 2022 under section 147 read with section 144, treating the cash deposits as unexplained and making an addition under section 69A.
Separate penalty orders dated 7 September 2022 imposed a penalty of ₹16,25,136 under section 271(1)(c) and ₹20,000 under section 271(1)(b). The present appeal concerned the latter penalty.
Orders Were Not Communicated to the Society
The society explained that the assessment and penalty orders had not come to its notice and that its authorised representative had not informed it about their passing.
According to the affidavit, the society became aware of these orders only after its representative received a show-cause notice dated 13 February 2023 concerning Assessment Year 2018-19.
Thereafter, appeals were filed against the assessment and both penalty orders, along with requests for condonation of delay. The appeal against the section 271(1)(b) penalty was filed on 13 June 2023.
The society attributed the delay to the failure to communicate the orders in time, rather than a deliberate decision to forgo the appellate remedy.
CIT(A) Refused to Condone 250-Day Delay
The CIT(A), through an order dated 4 February 2026, declined to condone the 250-day delay in the penalty appeal.
The appellate authority reasoned that the society had participated in the assessment proceedings by furnishing submissions. It therefore rejected the explanation that the society was unaware of the assessment order.
On that basis, the CIT(A) held that sufficient cause had not been established and dismissed the appeal without examining whether the penalty under section 271(1)(b) was justified.
The society challenged this refusal before the Tribunal and sought adjudication of the penalty dispute on merits.
Separate 15-Day Delay Before ITAT
The appeal before the Tribunal was itself delayed by 15 days.
The Secretary explained that the CIT(A)’s order had been received at the authorised representative’s email address. However, the representative communicated the outcome to the society’s former cashier, Shri Balram Yadav, who had retired in August 2025.
The Secretary came to know of the appellate orders on 28 April 2026. After approaching the earlier representative and obtaining further professional advice, steps were taken to file the Tribunal appeal.
An affidavit explaining these circumstances was placed on record. The Tribunal accepted that sufficient cause existed for the 15-day delay, condoned it and admitted the appeal.
ITAT Rejects Presumption of Awareness
Examining the delay before the CIT(A), the Tribunal considered the Secretary’s affidavit and the explanation regarding when the orders became known to the society.
It held that participation in assessment proceedings could not automatically be equated with knowledge of the resulting orders.
The Tribunal further observed that such participation did not, by itself, establish that the delay in pursuing an appeal was deliberate. The circumstances surrounding communication of the orders and the subsequent steps taken to seek appellate relief therefore required consideration.
Having regard to the explanation furnished, the Tribunal concluded that sufficient cause had been shown for the 250-day delay and condoned it.
Penalty Appeal Restored for Decision on Merits
Since the CIT(A) had dismissed the appeal solely on limitation, the merits of the ₹20,000 penalty had not been adjudicated.
The Tribunal accordingly set aside the impugned appellate order and restored the matter to the CIT(A). It directed that the appeal be decided on merits, in accordance with law, after providing the society a reasonable opportunity of being heard.
The assessee’s appeal was allowed for statistical purposes.
The ruling grants the society an opportunity to contest the penalty; it does not delete the penalty itself. Its central finding is that prior participation in assessment proceedings, standing alone, was insufficient to reject the supported explanation for delayed knowledge of the orders.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal by the assessee is directed against order dated 04.02.2026 passed by the National Faceless Appeal Centre [hereinafter referred to as the ld ‘CIT(A)’] for the assessment year 2015-16 raising following grounds:-
1. The Ld. CIT(A), NFAC has erred on facts and in law in 1 dismissing the appeal filed by the assessee by not condoning the delay of 250 days in filing the appeal.
2. The Ld. CIT(A), NFAC has erred on facts and in law in not 2 deciding on merit the action of AO in levying penalty of Rs.20,000/- u/s 271(1)(b) of IT Act, 1961.
3. The appellant craves to alter, amend and modify any ground of appeal.
4. Necessary cost be awarded to the assessee.
2. At the outset, the learned counsel submitted that there was a delay of 15 days in filing the present appeal before the Tribunal. In support of the application for condonation, an affidavit sworn by the Secretary of the assessee-society was filed, explaining the circumstances leading to the delay both before the learned CIT(A) and before the Tribunal. The relevant facts, insofar as they relate to the delay before the Tribunal, are that the appellate order was received at the e-mail address of the authorised representative, who communicated the same to the society’s former cashier, Shri Balram Yadav, who had retired in August 2025. The Secretary came to know of the order on 28.04.2026 and, upon obtaining professional advice, took steps to file the appeal. The relevant part of affidavit is reproduced as under:-
1. That I am Secretary of Adarsh Vidhya Mandir Samiti Nagar. The sole object of samiti is to impart education. In pursuance to its objects it is running educational institutionat Tehsil Brijnagar District Deeg.
2. That the return of Adarsh Vidhya Mandir Samiti Nagar for AY 2015-16 was not filed as its entre income was exempt u/s 10(23C)(iiiad) of the Act. The AO in view of cash deposit of INO notices were issued at secondary e- mail id of our counsel CA Sunil Mittal which is Rs.52,36,771/- in Axis bank account, reopened the case of assessee u/s 148 of the Act. All [email protected] whereas the primary e-mail id is [email protected]. CA Sunil Mittal in the e-filing portal filed the reply on 22.04.2021 and 14.11.2021 where it was explained that the source of cash deposit in the bank account is out of receipt of school fees for which cash book was filed.
3. That AO, however, vide order dt. 10.03.2022 framed u/s 147 r.w.s. 144 treated the cash deposit as unexplained and made addition of Rs.52,36,771/- u/s 69A of the Act. Further AO vide order dt. 07.09.2022 imposed penalty u/s 271(1)(c) of Rs.16,25,136/- and vide order dt. 07.09.2022, imposed penalty u/s 271(1)(b) of Rs.20,000/-.
4. That assessment order and the penalty orders did not come to our notice nor our counsel informed about such orders. It is only when the show cause notice dt. 13.02.2023 for AY 2018-19 was received by our counsel CA Sunil Mittal on his e-mail id [email protected], he informed about the passing of quantum order and penalty orders for AY 2015-16. Thereafter appeal was filed through our counsel CA Sunil Mittal against the quantum order on 03.05.2023 and against the penalty order u/s 271(1)(b) on 13.06.2023 and against the penalty order u/s 271(1)(c) on 14.06.2023 with a request to condone the delay in filing the appeal.
5. That before CIT(A), through CA Sunil Mittal, submission was filed explaining the source of cash deposit. However, Ld. CIT(A), NFAC vide order dt. 03.02.2026 dismissed the quantum appeal for the reason that assessee has not satisfactorily explained the reason for delay of 390 days in filing the appeal and for the same reason dismissed both the penalty appeals vide order dt. 04.02.2026.
6. That all the above orders of Ld. CIT(A) was received on the e-mail id of CA Sunil Mittal. However, he informed about passing of such orders to the earlier cashier of the society Sh. Balram Yadav on 22.04.2026 who retired in August, 2025. From him, I came to know about the passing of the orders on 28.04.2026 and thereafter when I approached CA Sunil Mittal on 06.05.2026, he advised to approach CA P.C. Parwal of Kalani & Co LLP for filing the appeal before ITAT.
7. That when I approached CA P.C. Parwal on 09.05.2026,he informed me that time limit for filing of appeal before ITAT has expired on 30.04.2026 and therefore the appeal is now being filed with the request to condone the delay in filing the appeal.
3. We have considered the explanation furnished by the assessee and the material placed on record. Having regard to the circumstances explained in the affidavit, we are satisfied that sufficient cause has been shown for the delay of 15 days in filing the appeal before the Tribunal. The delay is accordingly condoned, and the appeal is admitted for adjudication.
4. The assessee has also explained the delay of 250 days in filing the appeal before the learned CIT(A). As stated in the affidavit, the assessment and penalty orders were not brought to the notice of the society at the relevant time. The assessee came to know of the orders only when a show-cause notice for Assessment Year 2018-19 was received by its authorised representative, following which appeals were filed against the assessment and penalty orders along with applications seeking condonation of delay. It is the assessee’s case that the delay occurred because the orders were not communicated to the society in time by its authorised representative.
5. The learned CIT(A), however, declined to condone the delay of 250 days, observing that the assessee had participated in the assessment proceedings by furnishing submissions and, therefore, could not claim ignorance of the assessment order. On this basis, the learned CIT(A) held that no sufficient cause had been established and dismissed the appeal without adjudicating the issue on merits.
6. We have heard the rival submissions and perused the material available on record. The affidavit filed by the Secretary explains the circumstances in which the assessment and penalty orders came to the notice of the society and the subsequent steps taken to pursue the appellate remedy. The fact that the assessee had participated in the assessment proceedings does not, by itself, establish that it was aware of the orders subsequently passed or that the delay in filing the appeals was deliberate. Having regard to the explanation furnished, we are satisfied that sufficient cause has been shown for the delay of 250 days in filing the appeal before the learned CIT(A). The delay is accordingly condoned.
7. Since the learned CIT(A) dismissed the appeal without adjudicating the issue on merits, we consider it appropriate to restore the matter to his file for fresh adjudication. Accordingly, the impugned order is set aside, and the appeal is restored to the file of the learned CIT(A) for decision on merits, in accordance with law, after affording the assessee a reasonable opportunity of being heard.
8. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 23.10.2026
